The Southern African Development Community (SADC) will launch the region’s Free Trade Area (FTA) Sunday in an effort to deepen long-term economic integration.
To be held under the theme, “Free Trade Area for growth, development and wealth creation,” the 28th SADC summit will be held in Sandton, near Johannesburg, on Saturday and Sunday.
It will be preceded by the Council of Ministers meeting on Thursday and Friday, and the meeting of the Ministerial Task Force on Regional Economic Integration on Wednesday.
Briefing reporters here Tuesday ahead of the summit, South African Trade and Industry Minister Mandisi Mphahlwa said the launch of the FTA would formalize the elimination of trade tariffs among SADC member states, enhance economic integration and create bigger regional markets.
“The launch of the FTA is the beginning of a process we need to embark on to build both our productive and trade capacity, improve competitiveness of our industries and address the supply-side constrains that inhabit us from benefiting our agriculture and industrial base to promote intra-regional trade,” said Mphahlwa.
The launch of the FTA comes after the adoption of the 1996 Maseru Trade Protocol, which entered into force in January 2000 that paved a way for the FTA over a period of eight years.
Mphahlwa told reporters that the FTA has been noted to the World Trade Organization (WTO) and an examination was done during the meeting of the WTO Committee on Regional Trade Agreements held in May 2007 in Geneva.
He added that more work needed to be done to consolidate the FTA and make it work by addressing non tariff barriers, including trade facilitation measures, harmonizing industrial and competition policies and liberalizing of trade in services.
“The focus going forward should be on addressing the real economic constraints that hinder deeper integration in our region,” Mphahlwa explained.
He added that infrastructure development was also an essential element for creating conditions that would advise the integrating agenda and would need to be prioritized.
The SADC comprises Angola, Botswana, the Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe.
In the economic front, the performance was satisfactory in 2007and prospects for 2008 are generally good. Considerable progress has been made in attaining reasonable levels of economic growth in the region with economic growth remaining strong while inflation continued to go down.
According to the SADC Secretariat, most countries have recorded positive growth for five consecutive years, and substantial economic growth is registered in Angola with 19.8 per cent, followed by Malawi, Mozambique and Tanzania.
However, the level attained in economic growth falls short of the regional target, which was set at 7.0 per cent for 2008. Real gross domestic product (GDP) increased on average by 5.9 per cent in 2007, the same growth rate achieved in 2006.
The majority of the SADC member states have witnessed improvements in fiscal performance with declining fiscal deficits, which are the results of pursuing prudent fiscal policies and the initiative of the Highly Indebted Poor Countries, which are benefiting the member states.
The region has also witnessed substantial improvement in debt position but the current accounts of the balance of payments got worse in 2007 amid rising imports despite reasonable boost in exports.
Elaborating on some of the issues to be on the agenda during the summit, Deputy Minister of Foreign Affairs Aziz Pahad said other issues to be discussed would include electricity availability in the region as power deficits would persist between 2008 and 2012; social development especially relating to AIDS/HIV initiatives in the region and gender development.
He said the summit would also discuss the financing and construction of the new SADC headquarters.
The summit will also see President Thabo Mbeki taking over the Chairmanship of the regional organization from Zambian President Levy Mwanawasa.